Gambling on a Change in the Law
Australians are amongst the biggest gamblers in the world. The latest statistics published by the Queensland Treasury in the 36th Edition of Australian Gambling Statistics (considered the preeminent source of Australian gambling statistics) indicate that Australians’ spent over $25 billion on gambling in the financial year 2018-19 alone, which represents a staggering 2.02% of household disposable income Australia wide. Of this $25 billion, over $20.5 billion was spent on gaming, over $3.5 billion on racing, and just under $1 billion on sports betting.
For many Australians, gambling is a legitimate recreational activity enjoyed responsibly for entertainment purposes. However, unsurprisingly, given the amount Australians spend on gambling each year, problem gambling is a significant issue in Australia and the ramifications extend far beyond the individual, to their families and the Australian community at large.
A sadly all too familiar story is that of the problem gambler who has taken steps to try and prevent themselves from gambling but has been unable to. Indeed, many gaming venues, with full knowledge of the damage problem gambling can cause, offer patrons inducements to continue gambling such as complimentary alcohol and services or ‘special benefits’, especially where the patron is considered a high roller. Often, patrons or their families will seek a voluntary or mandatory exclusion order, or request that a venue does not cash the patron’s cheques or extend them credit, but the venue will nevertheless permit the patron to gamble. The harms are not just felt by the individual, and there have been reported instances of patrons stealing from their employer to fund their habit, and the employer having no recourse to recover the stolen funds.
It is generally recognised that under Australian law, gambling venues do not owe their patrons a duty of care to prevent them suffering economic loss, however, the door remains open, in certain limited circumstances, for a successful claim in negligence.
There have been several claims brought by a problem gambler against a gaming venue for losses suffered whilst gambling in Australia. The following brief examination of some of these cases and the decisions of the various courts, will delineate the circumstances required for a claim to be successful.
The question of a gaming venue’s duty of care towards problem gamblers was examined by the NSW Court of Appeal in Reynolds v Katoomba RSL All Services Club Ltd  53 NSWLR 43 (Reynolds). In Reynolds, the plaintiff brought a claim against Katoomba RSL to recover his gambling losses, after the club, having been informed the plaintiff was a problem gambler and asked to not cash his cheques or extend him credit, continually cashed his cheques and permitted him to gamble in the venue. It was held that no duty of care was owed by the club to the plaintiff. Speigelman CJ described the case as one where the loss followed a “deliberate and voluntary act on the part of the person to be protected” and suggested that economic loss caused by gambling should not be recoverable except in “exceptional circumstances”. Unfortunately, however, no guidance was given on what circumstances would be considered exceptional.
In Foroughi v Star City Pty Ltd  163 FCR 131 (Foroughi), the plaintiff brought a claim for breach of statutory duty of care against Star City Casino for losses of ‘hundreds of thousands of dollars’ suffered whilst playing roulette. In Foroughi, the plaintiff had requested that Star City exclude him from the venue (he sought a voluntary exclusion order) but nevertheless entered the venue some sixty-five times and continued to gamble. The voluntary exclusion order signed by the plaintiff stated that he acknowledged it was his responsibility not to enter the venue’s gaming areas and he undertook not to, and that he undertook to seek assistance and advice from a qualified counsellor. The Court held that the plaintiff was not owed a duty of care as he “expressly and voluntarily undertook responsibility for his own conduct in agreeing not to enter the gaming areas of Star City” and to seek counselling.
Kakavas v Crown Melbourne Ltd  250 CLR 392 (Kakavas) concerned an appeal to the High Court by Mr Kakavas (the appellant) after the Court of Appeal of Victoria dismissed his appeal of the decision of the Victorian Supreme Court that Crown had not engaged in unconscionable conduct by enticing him to gamble at their casino. The appellant’s claim in the High Court was that he was placed at a ‘special disadvantage’ in his relationship with Crown due to his pathological urge to gamble, and the fact that he was subject to an interstate exclusion order (IEO) made in NSW which meant that any winnings payable to him by Crown were to be forfeited to the State of Victoria. The appellant argued that because Crown knew of, or ought to have been aware of his special disadvantage, or was sufficiently on notice of it to require that they make further enquiries as to his circumstances, Crown should disgorge its takings to him. Ultimately, the appeal was dismissed on the basis that intervention to deprive Crown of the benefit of their bargain, on the basis that it was procured by unfair exploitation of the appellant required proof of a predatory state of mind, and Crown’s heedlessness of, or indifference to the best interests of the appellant was not sufficient as it fell short of victimisation or exploitation.
Despite none of the above claims being successful, it is clear that for a claim to be successful in negligence, there must be exceptional circumstances. Although there is no judicial guidance as to what circumstances would be relevantly considered exceptional, it is likely that they would involve proof of the venue deliberately seeking to take advantage of the patron. Similarly, for a claim of unconscionable conduct to be successful the venue would have to be shown to have a predatory state of mind.
Whilst both of these requirements would appear exceedingly difficult to accomplish, the door is not closed, and our team at Dormer Stanhope would like to hear from you if you have suffered losses gambling after taking steps to work with the venue towards your exclusion, if you have worked at a gambling venue and know more about special rewards, benefits and gifts for top gamblers, or if you are a business owner who has had a large amount stolen to feed a gambling addiction. Contact us today for a free consultation.
Where to Get Help?
Gambling Help Online: 1800 858 858
Lifeline: 13 11 14
Gambler's Help: 1800 858 858
Self help groups and counsellors